Guide to Car Insurance for Uber Drivers

Uber is among the most popular rideshare services globally. The convenience that comes with the app is unmatched. You no longer need to hop from one place to another in the search of a taxi! And with the number of uber consumers on the road increasing globally, the need for insurance is paramount.

A driver’s financial stability can quickly be crippled by one accident. Seeing the importance of auto insurance on the road, Uber offers insurance coverage for its drivers. However, Uber drivers may need separate insurance coverage to supplement auto insurance provided by Uber and personal auto insurance. 

What risks are Uber drivers exposed to?

While many people globally rely on ridesharing services such as Uber, drivers are exposed to various risks. For instance, Uber drivers have low insurance limits, carry the risk of third parties and their passengers and risk to their vehicle. This necessitates the need for ridesharing insurance coverage. 

Let’s first understand the stages of an Uber ride when the app is on. 

• The driver is available for a ride via the app

• The driver accepts the ride and heads to pick the passenger

• The driver picks the passenger and proceeds to the destination

When the Uber app is on, the driver uses Uber’s insurance.

Period 0: This is the stage where the Uber app is not in use. 

In this instance, an Uber driver will use his auto insurance coverage to cater to insurance needs if an accident occurs. 

Stage 1: The Uber app is on and the driver is waiting for a request

If the driver switches on the Uber app and waits for a ride request, third-party liability takes effect. 

A third-party liability coverage caters to property damage or bodily damage caused to another person other than the driver, or the vehicle in case an accident occurs. 

The liability covers:

• $50,000 per person injured in an accident caused by the Uber driver. This is the maximum one person can receive. It does not cover injuries sustained by the Uber driver. 

• $100,000- This is the total injury liability that Uber will cover per accident for injuries sustained to third parties regardless of how many people are injured or involved in an accident. Also, this amount does not cover injuries sustained by the Uber driver. 

• $25,000- This covers property damage incurred as a result of an accident where the Uber driver is at fault. This is also the maximum amount Uber will pay for property damage to third parties regardless of the extent of the damage. It does not cover damage to the driver’s car. 

You might think you are fully covered with third-party Uber insurance coverage until you make a claim. Please note that Uber insurance will not cater to any expense under this coverage until the driver makes claims on their policy. As such, if you do not have your insurance coverage, you can not make a claim. 

The third-party liability coverage will only cover you if:

• You do not have a ride-sharing endorsement. In this instance, Uber’s insurance will step in. 

• You have a ride-sharing endorsement, the policy will cover the damages. However, Uber will cater to any excess that you are unable to meet.

Stage 2- When the driver accepts a ride until the passenger alights

When the driver accepts a ride, Uber provides a $1 million liability coverage. This liability coverage applies to the passenger for injuries sustained in case of an accident when using Uber. It also covers vehicle damages and injuries caused by the Uber driver. However, this third-party liability coverage does not cater to injuries sustained by the Uber driver. 

The $1 million third-party liability coverage also covers uninsured/ underinsured bodily injury to motorists. If the Uber driver and the passenger are involved in an accident and suffer injuries at the fault of another driver who doesn’t have sufficient insurance, Uber will cover the expenses. 

The uninsured/ underinsured motorist bodily coverage also covers a hit-and-run accident. 

In the instance that an Uber driver accepts a ride up to the point that the passenger alights, a contingent comprehensive and collision coverage equal to the actual car value and a $1,000,000 deductible applies. This coverage will only provide collision and comprehensive coverage if the driver already has coverage. 

Frequently Asked Questions about Auto Insurance for Uber Drivers:

What personal auto insurance do uber drivers need?

In addition to the insurance provided by Uber, an Uber driver requires personal auto insurance coverage. However, this excludes Uber rides. This is because insurance companies price the auto-insurance coverage with the assumption that the driver will engage in personal rides only. Also, Uber rides puts a lot of miles on the car making it more susceptible to accidents if not well maintained. It is also a money-generating venture. 

As such, an Uber driver will require personal auto insurance coverage. This will ensure he is safeguarded from accidents that occur when the Uber app is not in use. Check also this post about car insurance for high-risk drivers.

Does a rideshare endorsement help?

A rideshare endorsement for a personal auto personal insurance policy is important. The add-on can fill gaps between Uber’s coverage and the driver’s personal coverage. In most instances, an endorsement adds 15% to 20% of the driver’s premium.

What is the importance of rideshare insurance?

Any type of insurance safeguards us against unforeseen accidents. Uber drivers need to have a rideshare endorsement. This protects Uber drivers from being dropped by insurance companies. By driving without coverage, you may cater for claims out of pocket. A rideshare endorsement hence protects your vehicle and your auto insurance policy. 

What steps are involved when purchasing rideshare insurance?

• We have discussed the importance of rideshare insurance above. If you want to purchase rideshare insurance, first confirm with your state authorities whether it’s available. If the service is not available in your state, consider commercial insurance. 

• If the rideshare insurance is available in your state, disclose to your insurer that you are an Uber driver. Failure to do this, your auto insurance policy may be cancelled. 

• Ensure you fill the gaps between your personal auto insurance policy and Uber’s insurance policy. 

• Compare quotes between different providers. Before you purchase rideshare insurance, shop around and compare quotes between different providers.